Israel votes after three years of war

Few Israeli politicians expected Benjamin Netanyahu to remain prime minister three years after the Hamas-led attack of 7 October 2023. The country had suffered its worst security failure, communities near Gaza had been overrun and a government that had made national security central to its claim on power appeared unlikely to survive.

It did. The war delayed the political reckoning, brought opposition leaders into an emergency cabinet and directed public attention towards the campaigns in Gaza, Lebanon and Iran. Netanyahu now presents those campaigns as evidence that Israel recovered its military initiative under his leadership.

Gadi Eisenkot offers a different account of the same period. The former military chief joined the emergency war cabinet shortly after the attack and left eight months later, accusing Netanyahu of conducting operations without defining their political purpose. Eisenkot’s son and a nephew were killed while serving in Gaza. His new Yashar party has placed responsibility for October 7, military conscription and institutional reform at the centre of its campaign.

Most final polls put Yashar close to Likud, sometimes slightly ahead. They also show why first place may matter less than the distribution of seats around them. Surveys conducted for Israel’s three main television networks placed Netanyahu’s outgoing coalition at approximately 50 seats, while the wider Israel Votes average gives it just over 52. The Zionist opposition, an unaligned reservists’ party and the two Arab-led lists divide most of the remainder.

Israelis elect a parliament rather than a prime minister. After consulting the parties, the president will ask the politician considered most likely to assemble the 61 votes required for a government. Neither Netanyahu nor Eisenkot currently has an obvious way to reach that number.

Arab turnout may decide whether Netanyahu stays

Eisenkot’s prospective coalition brings together parties with very different political histories. Yashar occupies the centre. Naftali Bennett and Yair Lapid have combined their parties under the Together banner. The Democrats draw from the remnants of Labor and Meretz, while Avigdor Lieberman’s Yisrael Beiteinu represents a secular and nationalist right.

Their shared objective is to remove Netanyahu. On several of the issues that follow, including Palestinian statehood, religion and the territorial future of the West Bank, their positions remain far apart.

Even if all four perform well, their combined representation may stop short of a majority. Forming a government would then require some form of cooperation with Ra’am or the Joint List, which together are expected to win approximately 14 seats.

Palestinian citizens comprise around one fifth of Israel’s population. Pollsters expect turnout among them to rise from 56% in 2022 to roughly 63% this year, driven by anger at the government, concern over violent crime in Arab communities and a sense that a close election gives their votes unusual weight.

Ra’am leader Mansour Abbas has pursued participation in government as a means of securing funding and policy commitments for Arab communities. His party joined the coalition led by Bennett and Lapid in 2021, becoming the first Arab-led party to enter an Israeli government. Abbas has again left open the possibility of supporting a coalition from inside.

The Joint List has shown less interest in cabinet membership. Its leaders have nevertheless indicated that they could support an Eisenkot government on selected votes, including the establishment of an inquiry into October 7. External support of this kind could allow Eisenkot to take office while leaving the Arab parties outside the formal coalition.

During the campaign, Eisenkot rejected including either party in his government. Bennett and Lieberman have taken similar positions. Reversing those commitments would expose them to accusations that their majority depended on parties opposed to Israeli military policy in Gaza and the West Bank. Refusing Arab support may leave them unable to remove Netanyahu.

The prime minister’s options are scarcely more comfortable. Lieberman has promised not to serve under him, while Bennett entered the election in alliance with Lapid after years of political hostility towards Netanyahu. The Reservists–New Economic Party, if it crosses the threshold, opposes the ultra-Orthodox exemptions on which Netanyahu’s present coalition depends.

Netanyahu has previously persuaded opponents to abandon campaign pledges once coalition negotiations began. This time, the disagreement includes his corruption trial, the conduct of the war and the presence of Itamar Ben-Gvir and Bezalel Smotrich in government. An opposition party joining him would probably demand that at least some of those obstacles be removed.

A unity government could avoid dependence on smaller parties, but support for that outcome is limited. An Israel Democracy Institute survey conducted during the final week found that a plurality of both Jewish and Arab respondents preferred another election to a rotational unity government or a minority administration.

Coalition negotiations may therefore continue for weeks. Netanyahu would remain caretaker prime minister throughout them and during any repeated election.

The inquiry and the Haredi draft divide the two camps

Israel’s military and security services have conducted internal reviews of October 7. The political decisions that preceded the attack have not undergone an equivalent investigation.

Netanyahu’s cabinet favours an inquiry whose membership and mandate would be determined by political agreement. The opposition supports a state commission with broad powers and members appointed through the judiciary. Eisenkot proposes that it examine the attack, the decade leading up to it and the management of the war.

Such an inquiry could consider the government’s long reliance on deterrence and economic concessions to contain Hamas, the warnings received before the attack, deployments around Gaza and decisions taken during the first hours. Its conclusions could determine responsibility among serving and former officials and shape the historical assessment of Netanyahu’s government.

In October, an Israel Democracy Institute survey found that 72% of Jewish respondents supported establishing a state commission. A government led by Eisenkot would probably create one quickly; another Netanyahu coalition is more likely to continue arguing over its form and mandate.

Military conscription has become nearly as important to the campaign. Ultra-Orthodox men studying in religious seminaries have traditionally received exemptions, an arrangement that became much more difficult to defend after three years of reserve mobilisation. The armed forces need additional personnel, while reservists and their families have faced repeated disruption to employment, education and family life.

The Supreme Court ruled in 2024 that the exemptions could not continue without a legal basis. Netanyahu’s coalition spent the remainder of its term searching for legislation acceptable to the ultra-Orthodox parties and to members representing serving communities. It did not find one.

Shas and United Torah Judaism may hold around 15 seats in the next Knesset. Any Netanyahu government will need their support, giving them substantial influence over conscription rules, religious education and public funding. The opposition parties support a wider draft and propose linking some government benefits to military or civilian service.

This dispute reaches well beyond military manpower. Employment among ultra-Orthodox men remains low, while their share of the working-age population is increasing. Decisions on education, conscription and welfare eligibility will affect the future labour force and the tax base that finances Israel’s expanding security commitments.

The parties also remain divided over the judiciary. Netanyahu’s allies want to revive elements of the overhaul pursued before October 7, particularly greater political influence over judicial appointments. Eisenkot’s programme promises to protect judicial independence, place a two-term limit on the premiership and reduce political appointments in the civil service.

An opposition government would consequently have a substantial domestic agenda even if disagreements prevented rapid movement on the Palestinian question.

The opposition has moved closer to Netanyahu on security

The coalition assembled against Netanyahu should not be mistaken for a return of Israel’s former peace camp.

Eisenkot spent four decades in the military and remains associated with the doctrine of using overwhelming force against infrastructure employed by armed groups. Bennett opposes Palestinian statehood and previously led the organisation representing West Bank settlement councils. Lieberman has long advocated a hard line towards Hamas and Iran.

The Democrats include politicians who favour negotiations and oppose settlement expansion, but they have avoided making those questions conditions for cooperation with Eisenkot and Bennett. Removing Netanyahu has taken precedence over defining a common Palestinian policy.

The European Parliamentary Research Service identifies several positions now shared across most of Israel’s Jewish political parties: opposition to immediate Palestinian statehood, continued freedom for Israeli military operations and the retention of buffer areas where the armed forces consider them necessary.

Differences remain over the political purpose attached to those measures. Ben-Gvir and Smotrich favour a long-term Israeli presence in Gaza, further settlement construction and forms of Palestinian emigration. Smotrich has used his authority over settlement administration to extend Israeli control in the West Bank, while Ben-Gvir’s management of the police has deepened confrontation with Palestinians and anti-government protesters.

Netanyahu’s reliance on both men has given them influence beyond their electoral strength. If his only viable majority again depends on their parties, they are likely to demand continued control over security, policing and settlement policy.

Eisenkot would be less constrained by the far right and more receptive to US proposals for Gaza’s administration and reconstruction. A government led by him could take firmer action against settler violence, slow some settlement activity and repair relations with European governments. It may also seek a larger role for international organisations or reformed Palestinian institutions in Gaza.

These are important differences, particularly for Palestinians living under Israeli control. They do not imply an early return to negotiations over a Palestinian state. Support for that outcome has fallen sharply among Jewish Israelis since October 7, and the opposition has avoided incorporating it into a common programme.

The military posture towards Lebanon, Syria and Iran is also likely to endure. Eisenkot may place greater emphasis on coordination with Washington and on defining an end state before operations begin. He is unlikely to accept restrictions that prevent Israel from striking a rebuilt Hezbollah presence, armed groups near the Syrian border or Iranian capabilities considered an immediate threat.

The election will therefore have greater consequences for Gaza’s administration, settlement policy and Israel’s diplomatic relationships than for the military’s latitude to operate across the region.

A larger military will dominate the next budget

Israel enters the election with a resilient economy and a much heavier security burden.

Defence accounted for around 16% of the state budget in 2022. The Israel Democracy Institute estimates that it will consume almost one quarter of spending in 2026. Military expenditure may remain close to 8%–9% of GDP this year, alongside the cost of reconstruction and support for communities affected by the fighting.

Technology investment, strong banks and substantial foreign-exchange reserves have helped the economy absorb repeated shocks. The domestic effects remain visible in reserve call-ups, reduced access to Palestinian labour and shortages in construction, agriculture and other sectors.

The Bank of Israel forecasts headline growth of 5.6% in 2026, although overseas production accounts for much of that increase. Growth excluding production abroad is expected to reach 3.4%. Its October forecast places the budget deficit at 4.4% of GDP this year and 4.6% in 2027, before taking account of measures adopted after the election.

The next government will have to decide how much of the wartime increase in defence spending becomes permanent. It must also finance reconstruction, respond to the cost of living and address public services that received less attention during the war. These commitments cannot all be met while taxes, debt and other expenditure remain unchanged.

Netanyahu’s current partners will seek to preserve funding for religious institutions and settlements. Eisenkot proposes to redirect some sectoral spending, expand core education, reward military or civilian service and invest more heavily in transport, healthcare and schools. His economic programme also promises stronger competition in concentrated consumer markets and fewer barriers to imports.

Several of those reforms could improve labour participation and productivity, but their benefits would emerge gradually. In the meantime, the government will face decisions on taxation, borrowing and the pace of civilian investment.

Government formation will affect companies through those choices. Sustained defence and reconstruction spending will support some sectors. Elsewhere, reserve service and worker shortages will continue to disrupt activity. A long caretaker period may delay procurement, infrastructure approvals and the 2027 budget.

The most revealing decisions will come after the result: who receives the first mandate to form a government, whether Eisenkot accepts support from Arab parties, whether Bennett or Lieberman maintains their refusal to serve with Netanyahu, and which parties obtain the finance, defence, justice and national security ministries.

Whatever coalition emerges will begin from assumptions formed since October 7: Israel needs more troops, threats should be confronted earlier and the political leadership has yet to account fully for how the attack became possible. The election will determine whether Netanyahu remains responsible for acting on those conclusions or whether Eisenkot is given the opportunity to do so.